Crackdown urged on black economy
Published 27/06/2011 | 00:12
The Government must clamp down on tax-dodging businesses, racketeering and dole cheats to tackle the growing black economy, it has been claimed.
The Irish Small and Medium Enterprises Association (Isme) estimated five billion euro was being lost in taxes a year because of illegal work practices.
It highlighted workers signing-on while secretly working and accused builders of undercutting competitors by offering VAT-free cash prices to customers.
Isme chief Mark Fielding said: "The level of black or unobserved economy activities depends on the incentives and opportunities to cheat.
"It is vital that the Government reduces the incentives to take business underground, by reviewing tax rates and public utility costs, by deregulating the labour market, addressing social welfare fraud and cutting red tape and a total revamp of the department of Social Protection."
Isme warned legitimate businesses would go bust, jobs would be lost and the state would continue to be out of pocket unless tough measures were taken.
It estimated the black economy in Ireland amounted to around 25 billion euro this year.
Mr Fielding said there had been a shift towards a cash-only "shadow" economy, particularly in the construction and maintenance sectors.
He said customers were now urging businesses to charge "off the books" to get cheaper prices by not having to pay VAT.
The Isme chief also said some people were secretly taking temporary work while signing on for illegitimate dole payments.